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Optimal Abatement in Dynamic Multipollutant Problems when Pollutants can be Complements or Substitutes

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  • Moslener, Ulf
  • Requate, Till

Abstract

We analyze a dynamic multi-pollutant problem where abatement costs of several pollutants are not separable. The pollutants can be either technological substitutes or complements. Environmental damage is induced by the stock of accumulated pollution. We find that optimal emission paths are qualitatively different for substitutes and complements. We derive general properties governing optimal emission paths and present numerical examples to illustrate our main results. In particular we find that optimal emission paths need not be monotonic, even for highly symmetric pollutants. Finally, we describe a comparatively simple method to implement the optimal path without explicitly knowing its shape. --

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Bibliographic Info

Paper provided by Christian-Albrechts-University of Kiel, Department of Economics in its series Economics Working Papers with number 2005,03.

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Date of creation: 2005
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Handle: RePEc:zbw:cauewp:2913

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Keywords: Multi-pollution; abatement technology; accumulating pollutants;

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References

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  1. Christoph Bohringer, Andreas Loschel and Thomas F. Rutherford, 2006. "Efficiency Gains from "What"-Flexibility in Climate Policy An Integrated CGE Assessment," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 405-424.
  2. Daniel Phaneuf & Till Requate, 2002. "Incentives for Investment in Advanced Pollution Abatement Technology in Emission Permit Markets with Banking," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 369-390, July.
  3. Cansier, Adrienne & Cansier, Dieter, 1999. "Umweltstandards bei Unsicherheit aus entscheidungstheoretischer Sicht," Tübinger Diskussionsbeiträge 170, University of Tübingen, School of Business and Economics.
  4. Leightner, Jonathan E., 1999. "Weather-induced changes in the tradeoff between SO2 and NOx at large power plants," Energy Economics, Elsevier, vol. 21(3), pages 239-259, June.
  5. Repetto, Robert, 1987. "The policy implications of non-convex environmental damages: A smog control case study," Journal of Environmental Economics and Management, Elsevier, vol. 14(1), pages 13-29, March.
  6. Yates, Andrew J. & Cronshaw, Mark B., 2001. "Pollution Permit Markets with Intertemporal Trading and Asymmetric Information," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 104-118, July.
  7. Michaelis, P., 1999. "Sustainable greenhouse policies: the role of non-CO2 gases," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 239-260, June.
  8. Jean-Marc Burniaux, 2000. "A Multi-Gas Assessment of the Kyoto Protocol," OECD Economics Department Working Papers 270, OECD Publishing.
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Citations

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Cited by:
  1. Ambec, Stefan & Coria, Jessica, 2013. "Prices vs quantities with multiple pollutants," Journal of Environmental Economics and Management, Elsevier, vol. 66(1), pages 123-140.
  2. Sophie Legras, 2011. "Incomplete model specification in a multi-pollutants setting : the case of climate change and acidification," Working Papers 44262, Institut National de la Recherche Agronomique, France.
  3. Kuosmanen, Timo & Laukkanen, Marita, 2009. "(In)Efficient Management of Interacting Environmental Bads," Discussion Papers 54287, MTT Agrifood Research Finland.
  4. Ralph Winkler, 2008. "Optimal compliance with emission constraints: dynamic characteristics and the choice of technique," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(4), pages 411-432, April.
  5. Pierre-André Jouvet & Marie Renner, 2014. "Social Acceptance and Optimal Pollution: CCS or Tax?," Working Papers 1403, Chaire Economie du Climat.
  6. Krysiak, Frank C., 2011. "Environmental regulation, technological diversity, and the dynamics of technological change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 528-544, April.
  7. Stefan Baumgärtner & Frank Jöst & Ralph Winkler, 2007. "Optimal dynamic scale and structure of a multi-pollution economy," Working Paper Series in Economics 50, University of Lüneburg, Institute of Economics.
  8. Wei-Bin Zhang, 2013. "Dynamic Interactions among Growth, Environmental Change, Habit Formation, and Preference Change," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 3(1), pages 3-25, December.
  9. Anke Gerber & Philipp Wichardt, 2013. "On the Private Provision of Intertemporal Public Goods with Stock Effects," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 55(2), pages 245-255, June.
  10. Legras, Sophie, 2011. "Incomplete model specification in a multi-pollutants setting: The case of climate change and acidification," Resource and Energy Economics, Elsevier, vol. 33(3), pages 527-543, September.
  11. Agee, Mark D. & Atkinson, Scott E. & Crocker, Thomas D. & Williams, Jonathan W., 2014. "Non-separable pollution control: Implications for a CO2 emissions cap and trade system," Resource and Energy Economics, Elsevier, vol. 36(1), pages 64-82.
  12. Regnier Camille & Sophie Legras, 2014. "Urban Structure and Environmental Externalities," INRA UMR CESAER Working Papers 2014/2, INRA UMR CESAER, Centre d'’Economie et Sociologie appliquées à l'’Agriculture et aux Espaces Ruraux.
  13. Ralph Winkler, 2008. "Optimal control of pollutants with delayed stock accumulation," CER-ETH Economics working paper series 08/91, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  14. Legras, Sophie, 2010. "Managing correlated stock externalities: water taxes with a pinch of salt," Environment and Development Economics, Cambridge University Press, vol. 15(03), pages 275-292, June.

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